2013 (4) TMI 464 - HC - VAT and Sales Tax

Tax Evasion - no evidence was produced by the assessee inspite of allowing time to produce the record, and on the basis of this, the Assessing Officer had passed the assessment order reiterating the earlier assessment order - Held that - While as per the remand order, the Assessing Officer was required to frame a fresh assessment order after complying the remand order passed by the Revisional Authority, but it appears that mechanically assessment order was passed by the Assessing Officer. When remand order was very specific in respect of certain directions, then those points ought to have been considered by the Assessing Officer even without production of any material by the assessee. The Assessing Officer ought to have recorded a fresh finding that there was tax evasion by the petitioner, on the basis of some material and documentary evidence tax evasion was found proved. But, in the Assessment Order and Revisional Order we do not find any such finding while it was necessary for the Assessing Officer and Revisional Authority to record such findings. From the perusal of the impugned order, it is find that after narration of the facts, the Revisional Authority because of non-production of any material before it by the petitioners reiterated the earlier order only, while as per directions issued by the Revisional Authority the Assessing Authority was under an obligation to meet out all the directions, but it appears that the Assessing Officer impressed with the fact that no evidence was produced before it by the assessee reiterated the earlier order, while it was under an obligation to decide the matter as directed by the Revisional Authority. When the important and vital issues are not considered by the Assessing Officer, the assessment order after remand cannot be sustained under the law - the petitioner shall cause appearance before the Assessing Officer on 04.03.2013.

Summary

Issues:
1. Assessment of tax evasion activities and reopening of assessments for various years.
2. Compliance with remand order and fresh assessment order.
3. Burden of proof on the Department and opportunity for cross-examination.
4. Consideration of documentary evidence and compliance with directions by the Assessing Officer.
5. Revisional Authority's decision and compliance with remand order.

Analysis:
1. The judgment involved controversies regarding tax evasion activities by the petitioner and the subsequent reopening of assessments for various years. The petitioner, a manufacturer of coke briquettes, was initially exempted from commercial tax and entry tax on the purchase of coal and the manufactured item. However, based on a task force report alleging tax evasion, assessments were reopened, leading to the imposition of tax and penalty on the petitioner.

2. The Order subject to revision highlighted discrepancies in the inspection reports and the lack of proper evidence collection by the Assessing Officer. The Revisional Authority found flaws in the assessment process, emphasizing the need for proper evidence collection, opportunity for explanation by the assessee, and the issuance of speaking orders based on sound reasoning.

3. The judgment addressed the burden of proof on the Department, emphasizing the necessity of allowing the petitioner an opportunity for cross-examination and the submission of evidence. The Revisional Authority noted the importance of considering all documentary evidence and providing a fair chance for the assessee to explain allegations.

4. The Assessing Officer's compliance with the remand order was a crucial issue in the judgment. It was observed that the Assessing Officer failed to frame a fresh assessment order as directed, leading to a mechanical imposition of tax without proper findings or compliance with the remand order's specifics.

5. The Revisional Authority's decision-making process and compliance with the remand order were scrutinized. It was noted that the Revisional Authority failed to consider the specific directions issued in the remand order, leading to a reiteration of the earlier order without due consideration of vital issues and compliance requirements.

In conclusion, the judgment emphasized the importance of compliance with remand orders, proper evidence collection, fair opportunities for the assessee to present their case, and the necessity of issuing speaking orders based on sound reasoning. The matter was remanded to the Assessing Officer for a fresh assessment order in compliance with the remand order, allowing the petitioner a fair opportunity to submit explanations within a specified timeframe.